Instead of making the monthly payment of $2,026 every month, you can make half the payment every two weeks (so that you will ma loan is unchanged? Note: Make sure to round all intermediate calculations to at least 8 decimal places. The number of payments will be [ (Round to two decimal places.)

Instead of making the monthly payment of $2,026 every month, you can make half the payment every two weeks (so that you will ma loan is unchanged? Note: Make sure to round all intermediate calculations to at least 8 decimal places. The number of payments will be [ (Round to two decimal places.)

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 17P

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Concept explainers

Effective Interest Rate

The term interest rate can be defined as the amount that is charged by the lender as a percentage on the principal amount. Interest rate which is charged annually is known as annual percentage rate.

Question

Oppenheimer Bank is offering a 30-year mortgage with an APR of 5.01% based on monthly compounding. With this mortgage, your monthly payments would be $2,026 per month. In addition, Oppenheimer Bank offers you the following deal:
Instead of making the monthly payment of $2,026 every month, you can make half the payment every two weeks (so that you will make 52/2=26 payments per year). With this plan, how long will it take to pay off the mortgage if the EAR of the
loan is unchanged? Note: Make sure to round all intermediate calculations to at least 8 decimal places.
The number of payments will be. (Round
two decimal places.)
C

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